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Man Or Machine? The Right Research Platform Will Use Both To Predict Markets

The recent roller coaster in the cryptocurrency market which saw most altcoins tumbling down in a zigzag pattern threw a lot of traders off balance. These events leave much to be desired in terms of studying the charts and making appropriate market predictions for a profitable venture.

The Benefits Of Leading Indicators

Knowing ahead of time which way the market will go is the utmost desire of every trader and investor, especially in a market as dynamic as the cryptocurrency market. It is usually very easy to analyse why a cryptocurrency rose or fell in price. No matter how good such analyses, it is almost of no use to the trader who would rather know why and how before it happens.

News and chart analyses have generally acted as the primary tools for anticipating market behavior, but the introduction of bots is becoming a popular idea for those looking for more in-depth analytics. These “bots” are usually computer programs that have the ability to analyze an unimaginably vast number of historical charts from across markets to aide in potentially predicting future market directions based on that analysis. These are known as leading indicators, since they are created with the intention of outputting entirely novel predictions from the array of historical data. Some of these bots, primarily as part of institutional trading strategy, go the extra mile of placing trades on behalf of their traders.

Existing Techniques Are Insufficient

Despite the progress made by these algorithmic trading systems, the prevailing volatile market conditions in specific assets like crypto, which are seeing increased regulatory attention from the governments, or in the equity market, which is seeing its own upheaval, make it necessary for a more effective approach in trading.

In order to overcome the complexities of current and future market conditions, more traders are going to rely on platforms that will accommodate crypto investors, traders and market experts alongside algorithmic analysis. As a result, there will be a greater need for such platforms to bring stakeholders together effective collaboration.

An example of this growing landscape of comprehensive market research platforms is the Signals project, which aims to connect traders’ own view of the markets to sophisticated machine learning techniques developed by data science specialists in the Czech Republic and tied to decentralized supercomputers. The tools provided therein can be employed by participants on the platform in the improvement of their own trading techniques and the creation of entirely new ones. Long-term, the Signals project holds the potential of allowing creators an opportunity to share and monetize their strategies as well.

Between Trading And Just Gambling

The present day trading ecosystem is full of participants who carry out their trades based on hope and guess work. Many traders who are trying out various systems and dabbling in various incarnations of A.I.-enabled market analysis generally end up confused and frustrated. Most are currently stuck between the lines, not sure anymore if they are trading or gambling.

The art of trading generally goes beyond gut feelings and luck to becoming both an academic, organized process and a creative and holistic endeavor. Seeing today’s markets current volatility only bears out how asset markets are influenced by a combination of concrete and emotional factors. As such, relying solely on mathematical analysis remains an insufficient approach. Therefore, hybrid systems that involve both mathematical analysis and human input in social communities will go — and are already going — a long way in helping traders and investors succeed. As the market continues to make its moves, systems such as the one developed by Signal will eventually represent the approach necessary to market prediction and successful trading.

The preceding article is from one of our external contributors.
It does not represent the opinion of Benzinga and has not been edited.